⚡What does PayPal do, in 30 seconds?
PayPal describes itself as a two-sided network linking consumers and merchants, with 439 million active accounts at the end of 2025 2. It earns mainly fees for completing payments 2. Its revenue was $33.2bn ✓ in FY2025, and transaction fees made up 90% ✓ of it.
📱What does PayPal sell?
PayPal reports two kinds of revenue, and fees on payments are by far the bigger one. Here is what each one covers and who pays it.
Transaction fees
Fees charged to merchants and consumers on each payment, based on the money moved. PayPal also charges for currency conversion, payments across borders, instant transfers to a bank or debit card, and buying and selling crypto 1. Its branded checkout lets shoppers pay in a few steps without typing card details, and buy now, pay later is built in 2. Braintree, its unbranded service, lets merchants take cards, wallets and local payment methods at online checkout 23. Transaction fees brought in $29.8bn ✓ in FY2025.
👥 Merchants of all sizes 2 and consumers, who pay for extras such as instant transfers and currency conversion 1.
Other value-added services
Money from partnerships, referral, subscription and gateway fees, interest and fees on PayPal's loans, and interest on some assets behind customer balances 1. PayPal-branded and Venmo-branded credit cards are issued through a partner bank in the U.S., which shares revenue with PayPal above a set level 21. This line brought in $3.4bn ✓ in FY2025.
👥 In certain markets, small businesses that borrow through PayPal Working Capital or PayPal Business Loan 2, partners and the partner bank behind its cards 21, and consumers who borrow from PayPal 1.
How the mix has shifted
Where the customers are
Most of PayPal's revenue comes from the United States, at 57% ✓ in FY2025. Other countries added 43% ✓. PayPal counts revenue in the country of the party paying its fee, and no other single country reached 10% of net revenues 123.
💸How does PayPal make money?
Follow the money from left to rightfrom top to bottom: what customers pay for, what it costs to make, and what is left as profit.
PayPal took in $33.2bn ✓ of revenue in FY2025. It reports no cost of sales, so its gross profit equals its revenue, $33.2bn ✓. Selling and admin costs took $4.3bn ✓. Other operating costs took $22.8bn ✓.
Part of what PayPal spends is the cost of moving money 1820. When a shopper pays with a credit card, PayPal pays card fees; debit cards cost it less, and bank transfers or balances cost very little 1820. Its transaction expense rate was 0.89% of payment volume in 2025, down from 0.94% in 2023 1820.
What remained was operating profit, the profit from the main business, at $6.1bn ✓. Other income added $0.2bn ✓, and tax took $1.1bn ✓. That left net income of $5.2bn ✓. Out of every $100 of revenue, PayPal kept about $16 ✓ as profit.
Out of every $100 customers paid in FY2025…
Interest, investment gains and other income added +$1 for every $100 of sales, so the slices above add up to a little more than $100.
⏱️ PayPal by the clock
Spread the FY2025 totals evenly over its 365 days and you get this. Source: PayPal Holdings, Inc. 10-K [5].
📈How is PayPal doing?
PayPal has grown every year for a decade, but more slowly lately. From FY2015 to FY2025, revenue grew 13.6% ✓ a year on average, and it rose in 10 ✓ of 10 ✓ years. Growth slowed to 4.3% ✓ in FY2025. Operating margin was 18.3% ✓ in FY2025, up from 15.8% ✓ in FY2015. Free cash flow was $5.6bn ✓ in FY2025.
In the four quarters to 31 March 2026, revenue reached $33.7bn ✓, up 5.8% ✓ on the four quarters before. Operating margin was 17.9% ✓. In the third quarter of 2026, net revenues rose 2% to $8.6 billion, while GAAP operating income fell 8% to $1.4 billion 28. That quarter, transaction revenue from Braintree and Venmo rose, while revenue from PayPal products fell about $240 million 22.
📝 The report card
PayPal earns middle marks for growth, profit and its balance sheet, and good marks for cash and steadiness. Every company is graded on the same fixed scale, so an A means the same thing on every page. The strip shows where PayPal (orange) and its 3 peers land; further right is better.
Growth
PayPal's revenue grew 6.4% ✓ a year over its last three fiscal years, which earns a C ✓ on the fixed scale. Fiserv grew at a similar 6.1% ✓, also a C ✓, while Mastercard grew 13.8% ✓, a B ✓.
Why this measure? (higher is better)
Growing sales is the engine of a business. Mature giants rarely grow fast, so 5% a year already earns a C.
Profitability
Over the last three years combined, PayPal kept 17.3% ✓ of revenue as operating profit, a C ✓. Card networks keep far more: Visa kept 63.2% ✓, an A ✓. Fiserv kept 27.5% ✓, a B ✓.
Why this measure? (higher is better)
Operating margin is the share of each sales dollar left after running the business. Software and platforms often clear 30%; hardware makers usually sit below 10%.
Cash generation
Over the last three years combined, PayPal turned 17.5% ✓ of revenue into free cash flow, a B ✓. Fiserv's 21.6% ✓ just clears the 20% line for an A ✓.
Why this measure? (higher is better)
Free cash flow is the cash left after paying for factories, data centres and equipment. It funds dividends, buybacks and new bets.
Balance sheet
PayPal's cash and investments were a little bigger than its borrowings (leases not counted). At the end of FY2025, net cash equalled 1.3% ✓ of a year's revenue, a C ✓. Its peers all owe more than they hold: Visa's figure was -20.0% ✓ and Fiserv's -133.1% ✓. By 31 March 2026, net cash had slipped to -$0.1bn ✓.
Why this measure? (higher is better)
More cash than debt gives a company room to ride out bad years. Some debt is normal; a lot of it makes a company fragile.
Steadiness
PayPal's yearly growth rates have a standard deviation of 6.2% ✓, a B ✓. Visa's 7.4% ✓ is also a B ✓. Fiserv is steadier still, at 2.3% ✓, an A ✓.
Why this measure? (lower is better)
Steady growers are easier to plan around. Big swings mean sales depend on product cycles, the economy or one-off events.
🧑🏫 How the grades work
- Same scale for everyone. Each measure has fixed cut-offs (shown under each strip). Clear the A line and you get an A, whatever your peers do.
- Three years together. Profitability and cash generation add up the last three fiscal years before dividing, so one unusual year counts for less than it would on its own (a year much bigger than the others still weighs most).
- Peers for context. The rank shows how PayPal compares with the group. Companies within 0.1 percentage point share a rank.
- Same source. Every company's figures come from its own latest annual report (10-K), so fiscal years end in different months.
- Judgement, openly stated. The cut-offs are QuantVantage.ai's view of what good looks like for a large, established company. They are not a forecast or a recommendation.
11 years at a glance
Where the cash goes
From FY2015 to FY2025, PayPal made $46.1bn ✓ of free cash flow and spent $33.4bn ✓ on buybacks and dividends. In FY2025 it spent $6.1bn ✓ on buybacks and $0.1bn ✓ on dividends, together 111% ✓ of free cash flow. PayPal paid its first quarterly dividend, $0.14 a share, on 10 December 2025 27. It bought back $1.5 billion of shares in the third quarter of 2026 28.
🧮Ratios 101: what are PayPal's key financial ratios?
Ratios shrink PayPal's big numbers into easy comparisons with Visa, Mastercard and Fiserv, which run very different payment businesses. A ratio divides one number by another so companies of any size can be compared. Each card shows the formula with PayPal's real FY2025 numbers, the peer median and the trend.
💰 Profitability: how much of each sale is kept?
Operating margin
What is left after also paying for research, marketing and running the company.
👉 PayPal's 18.3% ✓ is up from 15.8% ✓ in FY2015, but far below the 57.6% ✓ peer median set by the card networks.
📏 Rule of thumb: Above 20% is strong for a large company.
Net margin
The bottom line: profit after interest and taxes, per dollar of sales.
👉 PayPal keeps 15.8% ✓ of revenue as final profit, up from 13.3% ✓ in FY2015 and close to Fiserv's 16.4% ✓.
📏 Rule of thumb: Above 15% is strong; one-off tax items can move it in a single year.
Return on equity (ROE)
Profit earned for each dollar that shareholders have left in the company.
👉 ROE of 25.8% ✓ is up from 8.9% ✓ in FY2015 but below the 52.9% ✓ peer median.
📏 Rule of thumb: Around 15% or more is good, but buybacks shrink equity and can make ROE look huge.
⚙️ Efficiency: how hard do the assets work?
Return on assets (ROA)
Profit earned from everything the company owns, however it was paid for.
👉 ROA of 6.5% ✓ is low next to the 20.1% ✓ peer median, as profit is small next to PayPal's $80.2bn ✓ of assets.
📏 Rule of thumb: Above 10% is strong; banks and factories usually earn less.
Asset turnover
Dollars of sales squeezed out of each dollar of assets.
👉 PayPal's revenue is 0.4x ✓ the value of everything it owns, level with the 0.4x ✓ peer median and up from 0.3x ✓ in FY2015.
📏 Rule of thumb: Retailers often top 2x; asset-heavy businesses can sit below 0.5x.
🛟 Safety: could it survive a bad year?
Current ratio
Can short-term assets (cash, money owed by customers, stock) pay the bills due within a year?
👉 At 1.3x ✓, PayPal had $59.8bn ✓ of current assets against $46.4bn ✓ of bills due within a year, above the 1.0x ✓ peer median.
📏 Rule of thumb: Above 1.0x is the classic comfort line, but cash-rich giants can run below it on purpose.
Debt to equity
How much the company has borrowed for each dollar shareholders have in it.
👉 PayPal's 0.5x ✓ is below the 1.1x ✓ peer median, but it had almost no debt in FY2015, at 0.0x ✓.
📏 Rule of thumb: Below 1.0x is conservative. Like ROE, it can rise when buybacks shrink equity, even if debt has not changed.
Interest cover
How many times over operating profit could pay the year's interest bill.
👉 Operating profit was 13.8x ✓ interest costs, below the 26.2x ✓ peer median.
📏 Rule of thumb: Above 5x is comfortable; below 2x is a warning sign.
💵 Cash and owners: where does the money end up?
Cash conversion
Does reported profit turn into real cash? Free cash flow is operating cash minus capital spending.
👉 PayPal turns profit into cash at 1.1x ✓, level with the 1.1x ✓ peer median and down from 1.5x ✓ in FY2015.
📏 Rule of thumb: Near or above 1.0x means profits are backed by cash.
Stock pay
Pay given to staff in shares instead of cash. It is a real cost to owners because it adds shares.
👉 Stock pay is 3.0% ✓ of revenue, above the 1.8% ✓ peer median but down from 3.7% ✓ in FY2015.
📏 Rule of thumb: Under 5% of sales is modest for a tech company.
Shareholder payout
How much of the year's profit was handed back to owners.
👉 PayPal returned 118.1% ✓ of FY2025 profit through buybacks and dividends, above the 114.4% ✓ peer median. In FY2015 it returned 0.0% ✓.
📏 Rule of thumb: Above 100% means it returned more than it earned, using cash savings or debt.
Ratios use fiscal-year-end balance sheet values. Inputs are shown rounded, so dividing them can differ from the result in the last digit. A peer median leaves out peers that do not report the inputs, or where the ratio means nothing (for example, negative shareholders' equity). Rules of thumb are general guides from QuantVantage.ai, not hard limits. No share-price ratios (like price-to-earnings) are shown on this page.
🥊Who are PayPal's competitors?
PayPal works with the card networks and competes with them at the same time 1011 1213. When PayPal users pay with a stored card, the payment runs on a card network such as Visa's or Mastercard's 1011 1213. Fiserv and PayPal both sell payment acceptance to merchants of all sizes 141516.
| Company | Where they compete | Revenue | Growth/yr (3y) | Op. margin | FCF margin |
|---|---|---|---|---|---|
| PayPal (PYPL, FY2025) | Digital wallets, branded checkout, payment processing and consumer credit | $33.2bn | 6.4% | 18.3% | 16.8% |
| Visa (V, FY2025) | Card network; PayPal adds card payments to it, but competes when users pay from bank funds 1011 | $40.0bn | 10.9% | 60.0% | 53.9% |
| Mastercard (MA, FY2025) | Card network whose rules PayPal follows on card-funded payments; Mastercard counts digital wallets as rivals 1213 | $32.8bn | 13.8% | 57.6% | 52.3% |
| Fiserv (FISV, FY2025) | Payment acceptance for merchants of all sizes, through merchant acquiring, Clover and its Commerce Hub gateway 141516 | $21.2bn | 6.1% | 27.5% | 20.3% |
PayPal also competes with banks, card processors, other digital wallets, buy now, pay later lenders and real-time payment systems 1718. It says some rivals are larger and have better-known brands 1718. American Express names PayPal among the web and mobile payment platforms it competes with 31172.
🧭PayPal SWOT: strengths, weaknesses, opportunities and threats
💪 Strengths
- PayPal describes itself as a two-sided network of consumers and merchants, with 439 million active accounts in about 200 markets at the end of 2025 2.
- PayPal calls Venmo a leading U.S. mobile app for moving money between friends and family 2.
- Over the last three years combined, PayPal turned 17.5% ✓ of revenue into free cash flow, a B ✓ on our report card.
- Its transaction expense rate fell from 0.94% of payment volume in 2023 to 0.89% in 2025 1820.
🩹 Weaknesses
- Interim chief executive Jamie Miller said in February 2026 that PayPal's execution had fallen short, especially in branded checkout 21.
- In the first nine months of 2026, transaction revenue from PayPal products fell about $230 million 22.
- Two payment processors made up 56% of PayPal's transaction expense in 2025, up from 48% in 2024 23.
- Over the last three years combined, PayPal kept 17.3% ✓ of revenue as operating profit, against 27.5% ✓ for Fiserv and 63.2% ✓ for Visa.
🚀 Opportunities
- PayPal's 2025 annual report names new growth areas: crypto such as the PayPal USD stablecoin, shopping through AI agents, advertising, and PayPal World 2.
- Braintree's transaction revenue grew by about $1.1 billion and Venmo's by about $230 million in the first nine months of 2026 22.
- PayPal expects its April 2026 reorganization to deliver at least $1.5 billion of gross yearly run-rate savings over two to three years 22.
- In December 2025 PayPal applied to set up PayPal Bank in Utah; approval is not assured 17.
⚠️ Threats
- PayPal says some of its rivals are larger and have better-known brands 1718.
- In March 2026 the U.K. Financial Conduct Authority opened competition investigations into terms in PayPal's agreements with Visa and Mastercard 24.
- A securities class action filed in February 2026 says PayPal did not disclose obstacles to its branded checkout growth strategy 24.
- PayPal says card-funded payments generally cost it more than bank or balance payments, so a shift in how people pay changes its costs 1.
🏰Does PayPal have a moat?
Why 2?
PayPal generally does not charge consumers to fund or draw from their accounts 2. Active accounts grew 1% in 2025, while payment transactions fell 4% 2. In the third quarter of 2026, active accounts rose 0.6% to 440 million 19. PayPal competes with banks, card networks, other wallets and real-time payment systems 1718.
Why 4?
PayPal calls itself a two-sided network, with 439 million active accounts across about 200 markets at the end of 2025 2. PayPal says person-to-person payments through PayPal, Venmo and Xoom bring in new users, who open an account to send or receive one 2. Its protection programs draw on data from both sides of its transactions 2. Payment transactions per active account rose 6% to 60.8 over the 12 months to the third quarter of 2026 19.
Why 3?
PayPal handled $1.79 trillion of total payment volume in 2025 2. Its transaction expense rate was 0.89% of payment volume in 2025, down from 0.94% in 2023 1820. It spent $1.5 billion on research and development in 2025 2. But PayPal said merchant negotiations and a focus on profitable growth cut Braintree's volume and revenue in the first half of 2025, before growth returned in the second half 20.
Why 3?
PayPal holds money transmitter licences in the U.S. states that require them and a full New York BitLicense for crypto 217. It also holds a Luxembourg credit institution licence for its EU business, and calls its licences a distinct advantage 217. Its platform lets consumers send payments in about 200 markets and about 140 currencies 2. It has registered its core brands as trademarks and files patent applications 2. Its December 2025 application for PayPal Bank is not assured of approval 17.
A moat is what keeps rivals from taking a company's customers and profits. Scores are QuantVantage.ai's judgement (5 = strongest), set with the same rubric on every explainer (orange is PayPal; grey dots are peers).
🔭What should you watch next?
Next dividend
PayPal's next quarterly dividend of $0.14 a share is payable on 24 December 2026 to holders of record on 4 December 28.
Full-year 2026 results
In October 2026 PayPal guided to non-GAAP earnings per share of about $5.60 for 2026, up from about $5.38 in July 28. Figures on this page run to FY2025 and the four quarters to 31 March 2026.
PayPal Bank application
PayPal's December 2025 application to set up PayPal Bank in Utah needed approval from Utah regulators and the FDIC, which PayPal said in February 2026 was not assured 17.
📚Learn the words
❓Frequently asked questions about PayPal
How does PayPal make money?
PayPal makes most of its money from fees on payments it completes for merchants and consumers 2. In FY2025, transaction fees brought in $29.8bn ✓. Other services, such as loans and partnerships, added $3.4bn ✓.
Does PayPal own Venmo?
Venmo belongs to PayPal. It is PayPal's U.S. digital wallet for sending money between friends and family, and it also offers checkout and Venmo-branded cards 2.
Who is PayPal's CEO?
Enrique Lores has been PayPal's CEO since 1 March 2026; the board appointed him on 2 February 2026 25. Before becoming CEO, he had chaired PayPal's board since July 2024 2526. He also spent 30 years at HP, including six as HP Inc.'s chief executive 2526. The board said it made the change because the pace of change and execution had not met its expectations 26.
How many people use PayPal?
PayPal had 439 million active accounts at the end of 2025 2. That rose 0.6% to 440 million in the third quarter of 2026 19.
Does PayPal pay a dividend?
PayPal started paying a quarterly dividend in December 2025, at $0.14 a share 27. The next one, also $0.14, is payable on 24 December 2026 28.
What is PayPal USD?
PayPal USD, or PYUSD, is a U.S. dollar stablecoin launched in August 2023 by a separate issuer that partners with PayPal 29. PayPal and Venmo customers in certain markets can use it 29.
Who are PayPal's biggest competitors?
PayPal competes with banks, card networks, card processors, other digital wallets and buy now, pay later lenders 1718. PayPal's wallets add card payments to networks such as Visa's, but also compete with them when users pay from bank funds 1011 1213. Fiserv and PayPal both sell payment acceptance to merchants 141516.
How much does PayPal spend on research?
PayPal spent $1.5 billion on research and development in both 2025 and 2024 2. Back in FY2015, it spent $0.8bn ✓.
🎮Play: higher or lower, then test yourself
Figures come from each company's latest annual report (10-K); fiscal years end in different months. Sources: [5] [8] [7] [6].
🧠 Test yourself
5 quick questions. Score: 0 / 5
1. About how much of PayPal's FY2025 revenue came from transaction fees?
2. Which payment app for friends and family belongs to PayPal?
3. Who became PayPal's CEO on 1 March 2026?
4. When did PayPal pay its first quarterly dividend?
5. In about how many markets can people send payments with PayPal?
🔎Sources and method
Every figure comes from a source listed here or is calculated from those sources (marked ✓). Company financials are taken from SEC filings (10-K and 10-Q) as tagged in XBRL. Peer grades rank the same measures across the company and its peers. This page contains no share-price data and no valuation.
- PayPal Holdings, Inc. Form 10-K for fiscal year 2025 — Item 7 MD&A: revenue categories, 2025 transaction and other value added services revenue drivers, revenue and payment volume outside the U.S., cross-border volume, funding costs, seasonality (accessed 2026-10-31)
- PayPal Holdings, Inc. Form 10-K for fiscal year 2025 — Item 1 business: overview, key metrics, strengths, products, protection programs, technology, research and development, intellectual property, workforce (accessed 2026-10-30)
- PayPal Holdings, Inc. Form 8-K, Exhibit 99.1: strategic reorganization press release (April 29, 2026) — Three-business operating model and what each business holds (accessed 2026-10-31)
- PayPal (PYPL) Form 10-K for fiscal year 2025, filed 2026-02-03 — revenue by product, segment and geography (accessed 2026-10-28)
- SEC EDGAR companyfacts: PayPal (PYPL) — annual 10-K facts (accessed 2026-10-28)
- SEC EDGAR companyfacts: FISERV INC (FISV) — annual 10-K facts (accessed 2026-10-28)
- SEC EDGAR companyfacts: Mastercard Inc (MA) — annual 10-K facts (accessed 2026-10-28)
- SEC EDGAR companyfacts: VISA INC. (V) — annual 10-K facts (accessed 2026-10-28)
- SEC EDGAR companyfacts: PayPal (PYPL) — balance sheet at 2026-03-31 (accessed 2026-10-28)
- Visa Form 10-K for fiscal year 2025 — Item 1 competition: network comparison table for calendar 2024 and types of competitors (accessed 2026-10-30)
- PayPal Form 10-K for fiscal year 2025 — Item 7 transaction expense: card and bank funding sources in the PayPal wallet (accessed 2026-10-30)
- PayPal Form 10-K for fiscal year 2025 — Item 1 Competition; network rules risk factor; transaction expense and funding mix (accessed 2026-10-30)
- Mastercard Form 10-K for fiscal year 2025 — Item 1 Competition: rival networks, pricing pressure, account-based and government systems, wallets (accessed 2026-10-30)
- Fiserv, Inc. Form 10-K for fiscal year 2025 — Item 1 overview, Merchant segment (Small Business, Clover, Enterprise, Processing, distribution channels) and human capital (accessed 2026-10-30)
- Fiserv, Inc. Form 10-K for fiscal year 2025 — Item 1 intellectual property, competition and government regulation (Regulation II debit routing, bank examination, licences, card network rules) (accessed 2026-10-30)
- PayPal Holdings, Inc. Form 10-K for fiscal year 2025 — Item 1: merchant solutions (branded checkout, unbranded processing, point of sale) and competition (accessed 2026-10-31)
- PayPal Holdings, Inc. Form 10-K for fiscal year 2025 — Item 1 competition and government regulation: rivals, licences, PayPal Bank application (accessed 2026-10-30)
- PayPal Holdings, Inc. Form 10-K for fiscal year 2025 — Item 1A risk factors: competition, card funding costs (accessed 2026-10-30)
- PayPal Holdings, Inc. Form 8-K, Exhibit 99.1: third quarter 2026 results release (October 27, 2026) — Q3 2026 payment volume, transactions, active accounts (accessed 2026-10-30)
- PayPal Holdings, Inc. Form 10-K for fiscal year 2025 — Item 7 MD&A: transaction revenue, Braintree, transaction expense rate (accessed 2026-10-30)
- PayPal Holdings, Inc. Form 8-K, Exhibit 99.1: fourth quarter and full year 2025 results release (February 3, 2026) — Interim chief executive's comment on 2025 execution (accessed 2026-10-31)
- PayPal Holdings, Inc. Form 10-Q for the quarter ended September 30, 2026 — Item 2 MD&A: strategic reorganization and savings, transaction and other value added services revenue drivers, revenue outside the U.S. (accessed 2026-10-31)
- PayPal Holdings, Inc. Form 10-K for fiscal year 2025 — Notes to the financial statements: incorporation, revenue by geography, concentration of transaction expense (accessed 2026-10-31)
- PayPal Holdings, Inc. Form 10-Q for the quarter ended September 30, 2026 — Note 13 litigation and regulatory matters: securities actions, FTC, CFPB, German and U.K. competition reviews (accessed 2026-10-31)
- PayPal Holdings, Inc. Form 8-K (February 3, 2026), Item 5.02 — Chief executive change, interim chief executive, board chair (accessed 2026-10-31)
- PayPal Holdings, Inc. Form 8-K, Exhibit 99.1: press release on the appointment of Enrique Lores (February 3, 2026) — Board's reasons for the chief executive change; Lores background; years in business (accessed 2026-10-31)
- PayPal Holdings, Inc. Form 10-K for fiscal year 2025 — Item 2 properties and Item 5 dividends: headquarters, land, first quarterly dividend (accessed 2026-10-31)
- PayPal Holdings, Inc. Form 8-K, Exhibit 99.1: third quarter 2026 results release (October 27, 2026) — Q3 2026 net revenues, transaction margin dollars (non-GAAP), operating income, guidance, dividend, capital returns (accessed 2026-10-31)
- PayPal Holdings, Inc. Form 10-K for fiscal year 2025 — Item 1A risk factors: PayPal USD stablecoin (accessed 2026-10-31)
- SEC EDGAR companyfacts: PayPal (PYPL) — quarterly 10-Q/10-K facts (accessed 2026-10-28)
- American Express Company Form 10-K for fiscal year 2025 — Item 1 competition: payment platforms named as competitors (accessed 2026-10-31)